1. ASSESSING THE SOCIAL AND ECONOMIC IMPACT OF GAMBLING Dr. Harold Wynne University of Alberta

2. WHY BOTHER? Fish Are Being Harmed Alberta Tar Sands People Are Being Harmed Problem Gambling

3. WHO’S DOING IT? Canada United States United Kingdom Australia and NZ Canadian SEIAs Vallaincourt & Roy (2000) – Canadian National level Blue Thorn Research (2006) – BC lower mainland Hann & Williams (in progress) – Belleville racino Anielski et al. (in progress) – Nova Scotia provincial level Williams et al. (in progress) – Alberta provincial level

4. WHO’S DOING IT? Canada United States United Kingdom Australia and NZ American SEIAs National Opinion Research Centre (1999) – Gambling impact in U.S. U.S. General Accounting Office (2000) – Gambling impact in U.S. Garrett (2003) – Casino gambling in America ECONorthwest (2005) – Indian gaming in Oregon Koo et al. (2005) – Casino gambling in Ohio Rappaport Institute (2005) – Casino gambling in Massachusetts Policy Analytics (2006) – Indiana’s riverboat casinos

5. WHO’S DOING IT? Canada United States United Kingdom Australia and NZ United Kingdom SEIAs NERA (2005) – Casino in the Wembley development area February 2008 – “Super Casino” for Manchester dumped PM Brown overturned PM Blair’s decision because of “fears the negative social effects of promoting gambling would outweigh the potential tax revenue and any regeneration benefits for Manchester” The turnaround had been influenced by research into the broader effects of casinos such as James Packer's Crown casino in Melbourne.

6. WHO’S DOING IT? Canada United States United Kingdom Australia and NZ Australia SEIAs Australian Productivity Commission (1999) – socio-economic impacts of gambling in Australia Pinge (2001) – Impact of EGMs in Bendigo, Victoria SA Centre for Economic Studies (2001) – impact of EGMs in South Australia SA Centre for Economic Studies (2005) – Community impacts of EGMs in Victoria SA Centre for Economic Studies (in progress) – Economic impacts of Gambling in the South Australian community New Zealand SEIAs AIGR (2001) – socio-economic impacts of gambling in New Zealand Adams (2004) – gambling impact assessment in Auckland

7. WHAT HAVE THEY DISCOVERED? Canada Blue Thorn Research (2006) – BC lower mainland Purpose BC Government wanted to know costs/benefits of adding 4 new BC Government wanted to know costs/benefits of adding 4 new venues in Vancouver, Langley, and Surrey (2 racinos & 2 casinos) Method telephone survey; patron survey; key informant interviews estimating the “multiplier effect” Conclusions 14 conclusions about social impact; 4 “trends” about PG no conclusions about the economic impact Reported Limitations “Because of the small number of observations and available data in the period after gaming venues were introduced, no statistically valid multiplier estimates are available” “The impact analysis in this report is limited because it is based on data collected shortly after the casino opening dates”

8. WHAT HAVE THEY DISCOVERED? United States Policy Analytics (2006) – Indiana’s riverboat casinos Purpose Indiana Legislative Council wanted to assess impact of riverboat casinos system Method uses Grinols (2004) cost/benefit framework to measure specific Costs/benefits in 7 areas to analyse player data compares counterfactual policy—what if Indiana had no casinos? Conclusions “The benefits to Indiana citizens from Indiana’s policies of “The benefits to Indiana citizens from Indiana’s policies of licensing, regulating, and taxing ten riverboat casinos are significantly larger than the costs” Reported Limitations none Walker (2006) provides a “review” citing 7 major limitations beginning with reliance on “one researchers perspective (i.e., Grinols)

9. WHAT HAVE THEY DISCOVERED? United Kingdom NERA (2005) – Casino in the Wembley development area Purpose identify the costs/benefits of a proposed casino for the WDA London Borough of Brent added “social impact” assessment Method framework from literature to identify benefits, costs, transfers used employment multiplier estimated day/night and foreign casino visitors considered comparator developments (hotel/office, residential) Conclusions “The casino is more beneficial than either comparator over the four year period although the scale of this benefit declines over time” “There will be a number of social impacts in Brent as a direct result of the development of a new casino” “A casino will increase the rate of problem gambling locally and any negative impacts will be felt disproportionately” Chinese population within the borough will be more likely to visit a casino and may be more vulnerable Reported Limitations GBDVS data are “significantly aggregated” which “introduces measurement error into our distance measures”

10. WHAT HAVE THEY DISCOVERED? Australia And New Zealand SA Centre for Economic Studies (2005) – Community impacts of EGMs in Victoria Purpose “Not the role of the researchers to provide recommendations to the Victorian or Western Australian Governments, as the primary aim of this project was to report the impacts of different gambling environments at the State and regional level.” Method match Western Australia regions (no EGMs) with Victoria regions on key factors (7 pairs of regions) mail-out survey (N=7000); consultation with key stakeholders; analyse available data, conduct surveys Conclusions “From a public policy perspective it is likely that a more limited number of destination centres would contribute significantly to harm minimisation, the effectiveness of monitoring and regulation, industry self-regulation, improved monitoring of programs such as self-exclusion and the capacity to provide consumer protections.” Reported Limitations “data limitations restrict definitive judgment on the impact of gambling on many community services”

11. WHAT ARE THE RESEARCH IMPLICATIONS? Research Implications 1. Analytical Framework is Needed careful consideration of candidate perspectives (Walker) 2. Data is Key and Often Limited small number of observations after venue opens (BC) data are often difficult to disaggregate (GBDVS) 3. Consider the Counterfactual and Comparators no casino (Indiana) or alternative developments (Wembley) 4. Consider Disproportionate Effects on Vulnerable Populations low income groups and Chinese population (Wembley) 5. Consider Assessing “Matched Pairs” of Communities compare West Australia (no EGMs) with Victoria (27,000 EGMs)

12. FINAL COMMENT The size of the social costs—40 percent—of the costs of drug abuse— are not so great that the economy cannot sustain them. The economy could almost surely sustain the costs of three, four, or more social problems of this size. The question, however, is why should the economy accept an unnecessary social cost? Unlike American prohibition of alcohol, which most regard as a failure, criminalization and prohibition of casino gambling was successfully practiced for most of the twentieth century. Perhaps we can learn ways to offer gambling That do not lead to harmful consequences. However, if not, the logical implication is to ask whether the experiment in the present generation should be allowed to continue or should be reversed. Earl Grinols. Gambling in America: Costs and Benefits. 2004